While the United States and China have not gone as far as re-introducing or increasing tariffs on each others’ imports, the war of words between the two trading superpowers has clearly escalated with Hong Kong caught in the middle. In line with our expectations the Chinese Renminbi has depreciated versus (a weaker) Dollar and in nominal effective exchange rate terms
Read moreGlobal GDP growth, in year-on-year terms, slowed to -2.7% in Q12020 from +3.1% in Q4 2019 and in quarter-on-quarter terms to -4.5% from +0.6% in Q4, based on growth rates in 14 major economies accounting for close to 90% of world GDP. Global GDP growth in Q1 was at its weakest in over thirty years, at least in quarter-on-quarter terms.
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Read moreThe BEA will release tomorrow its first estimate of US GDP growth in Q1. Consensus estimate for the quarter-on-quarter seasonally-adjusted annualised rate of growth is -4.0%. If correct this would imply that growth in Q3 and Q4 2019 was effectively wiped out and that GDP in Q1 2020 shrank by annualised $200bn. The estimates span from -0.3% to -10% –
Read moreForecasts of the scale of a likely global economic recession and the shape of the recovery often give little thought to the economic variables being measured or their timeliness. Based on 4X Global Research’s own quarterly global GDP series and its correlation with the global PMI Composite Index, we estimate that global GDP growth slowed to about 0.5% yoy in
Read moreThe consensus forecast is that GDP contracted in many major economies in Q1 and will most definitely contract in Q2 as a result of the negative impact of national lockdowns on supply and demand. The implication is that these economies will be in recession – defined at a country level as two consecutive quarters of negative quarter-on-quarter GDP growth. A
Read moreWe argued in Lack of US market & macro volatility both reassuring and troubling (17 January) that “the market’s willingness to look through domestic political and geopolitical events suggests that only a significant exogenous or endogenous shock currently beyond markets’ radar screens (an “unknown unknown”) is likely to really move the needle”. That unknown unknown, a “black swan” event, has
Read moreDeveloped central banks in the past week have been falling over themselves to loosen monetary policy and secure the proper functioning of financial and credit markets. The Fed, RBNZ, Bank of Canada, Bank of England and Norges Bank have delivered inter-meeting policy rate cuts of between 50bp and 100bp and our measure of the developed central bank policy rate has
Read moreThe drastic measures which governments across the world have taken so far to mitigate the spread of the coronavirus have few precedents outside of war times and therefore quantifying their economic, financial and social impact remains challenging. However, there is little doubt that economic activity in China, the epicentre of the epidemic, has slowed sharply. Disruptions and delays to international
Read moreIn reaction to the coronavirus epidemic governments across the world have enacted measures unprecedented in recent decades, including closing national borders, setting up quarantine zones, restricting travel and closing factories and schools. Economic activity in China has slowed sharply and disruptions to international supply chains are impacting global trade and production with the slump in tourism heaping further pressure on
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